Thomas Schelling wins Nobel Prize in Economics

A colleague won the Nobel Prize in Economics today for his work in game theory. Congratulations to TS. He has done interesting work taking aggregation out of economics and plugging in long-term interrelation. This has meant application to politics and other international fields with real-world consequences. A good trend for the Nobel Committee.

And take special note of this blurb from the Washington Post:

Schilling's most prominent book is "The Strategy of Conflict," published in 1960, which "has influenced generations of thinkers," said the Nobel committee. The economics sciences prize is awarded by the Bank of Sweden Committee for the Prize in Economic Sciences.

Schilling "was particularly intrigued by the ways in which the parties' negotiating strength could be affected by different factors, such as the initial alternatives at their disposal and their potential to influence their own and each others' alternatives during the process," the committee said in its background material.

In the field of global strategic cooperation, he focused on the "long-run gains a party could achieve by making short-run concessions."

He "showed that a party can strengthen its position by overtly worsening its own options, that the capability to retaliate can be more useful than the ability to resist an attack, and that uncertain retaliation is more credible and more efficient than certain retaliation," the Nobel academy said. "These insights have proven to be of great relevance for conflict resolution and efforts to avoid war."